The group is focused on the mechanisms of (1 how gene-specific transcriptional activators interact with RNA polymerase II transcription machinery to regulate messenger RNA synthesis; and 2) how tumor viral proteins perturb normal cellular interactions for transforming the cells. Transcription initiation factor TFIID plays a central role in transcriptional regulation by facilitating promoter responses to various activators. TFIID is a large multisubunit complex, consisting of the TATA-box binding protein (TBP) and a number of tightly associated subunits (TAFs). We observed that both Drosophila TAFII230 (dTAFII230) and the homologous yeast TAFII145 (yTAFII145) interact directly with TBP and inhibits TBP binding to the TATA box in the absence of other TAFs. Deletion analysis indicates that N-terminal regions of TAFs (156 residues in dTAFII23O; 7l residues in yTAFII145) have both binding and inhibitory activities. These regions contain two functional subdomains, I and II, which synergistically contribute to stable TBP-binding. Importantly, subdomain-II recognizes basic repeats on the upper surface of TBP that are also critical for TFIIA-binding, whereas subdomain-I competes with transactivator VFl6 on the under surface of TBP. To determine the biological properties of the inhibitory activity, the yTAFII145 gene was replaced with the mutant lacking the inhibitory domain. The mutant strains are viable, but grow slowly. These results imply that the inhibitory domain plays a key role in transcriptional regulation by communicating with TFIIA and activators. The cellular protein p300/CBP is a target of the adenoviral E1A oncoprotein. Although this interaction is crucial for E1A transforming function, the mechanisms by which E1A modulates cell growth through p300/CBP are poorly understood. We describe here a cellular CBP- associated factor (CAF) which binds to the CBP site recognized by E1A. Although CAF was cloned as a human counterpart of the yeast transcriptional cofactor GCN5, the nonconserved N-terminal region of CAF mediates interaction with CBP in vitro. This interaction is disrupted by E1A. Remarkably, overexpression of CAF in HeLa cells inhibits cell cycle progression. Consistent with the in vitro competition, this effect is partially counteracted by E1A. These results provide new insights into the molecular mechanisms of tumorigenesis.